COMMISSIONER OF INCOME TAX Vs. KESAVA REDDIAR K

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following two questions of law for the decision of this court:

(2.) THE respondent in this reference is an assessee to income-tax. We are concerned with the assessment year 1975-76.

(3.) IT is settled law that the revised order or the order passed in the reassessment proceedings dated October 31, 1980, recording that the reassessment is closed as "N. A." (not assessed or not assessable or nil assessment), is a final order, lawfully terminating the assessment proceedings. See the decision of the Supreme Court in Esthuri Aswathiah v. ITO [1961] 41 ITR 539. The proceedings dated October 31, 1980, closing the proceedings as "N. A." is an assessment order. (See also Kanga and Palkhivala's "The Law and Practice of Income-tax", Vol. I, 7th Edition, page 904.) The effect of reopening the assessment is to vacate or set aside the initial order of assessment and substitute in its place the order made in reassessment proceedings. The initial order of assessment cannot survive in any manner or to any extent. The result of reopening the assessment is that a fresh order of assessment should be made. IT was so done in this case by the revised proceedings dated October 31, 1980. The above legal position is settled in view of the decisions of the Supreme Court in CST v. H.M. Esufali H.M. Abdulali (1973] 90 ITR 271 and Deputy Commissioner of Commercial Taxes v. H.R. Sri Ramulu [1977] 39 STC 177. In view of the above legal position, in this case, the original assessment order dated March 7, 1978, no longer survived or was in existence when the Tribunal took up for hearing the appeal filed by the Revenue, I. T. A. No. 251 (Coch) of 1979. The Tribunal was justified in holding that since the original order of assessment passed by the Income-tax Officer dated March 7, 1978, has been superseded or set aside by the revised order dated October 31, 1980, the appeal filed before it by the Revenue did not merit consideration, and in dismissing the said appeal. In this view of the matter, the Tribunal was justified in not considering the appeal filed by the Revenue on merits. There is no illegality on that score. Question No. 1 referred to us should be answered in the affirmative, against the Revenue and in favour of the assessee. Question No. 2 should be answered in the negative, against the Revenue and in favour of the assessee.